Overproduction

https://www.hmoperationsmanagement.com/post/over-production

Overproduction is translated from the Japanese word “Tsukurisugi.” Japanese describes this word in many symbols.

The first two are “作る” and “造る,” which are the traditional two Kanji.

作る = to make something small. Includes intangible things.

造る = to make something large. Physical objects only.

If I “produce” a car, I will use 造る. If I produce components of a car, I will use 作る.

If I think about why Ohno used Hiragana [つくりすぎ], it is probably because he wanted to use both.

First, overproduction applies to both small components and large finished goods. Finished goods should be produced Just In Time to sell what has been produced immediately. The part should be made according to the pull from the finished goods. The entire flow should have Just In Time. Otherwise, we will have the waste of overproduction.

But another aspect of waste of overproduction that Ohno wanted to pay attention to must be the intangible aspects.

If we focus on the tangible side only, it will be only inventory. Inventory cost includes the cost of capital, handling, and management. Inventory is vital, but is it critical to be the worst waste?

Intangible aspects of overproduction are more “criminal.” Something harder to see. As Ohno has mentioned, “Too many workers, equipment, and product only increase the cost and cause secondary waste. “Toyota Production System, (P.54)” Maybe it is the same worker, equipment, or product. But when they exceed the necessary quantity, their work becomes a waste. And those overproduction creates secondary wastes. For example, additional workers require additional personal administration and training. A machine will require additional maintenance. To some degree, daily schedule changes. If production can produce one by one flexibly to the leveled demand, then there is no need for schedule change. Yet, as we produce in batches, there is a continuous need to change the schedule since the batch never meets the market, which requires additional resources. Overproduction exists in every activity of the business. And that is why it is the most significant waste.

What is even more complicated is the phycology of the worker. Overproduction creates a false impression that it is productive. It makes you feel “busy.” It makes someone feels they did a great job. Even if it is “value-adding work,” the moment you do more than the customer's needs, it becomes overproduction. Compared with other wastes, it is harder to recognize. It is more ubiquitous, while harder to understand as waste. That’s why it is the most significant waste.

Perhaps the most miss leading explanation of “overproduction” is a picture of inventory. A better question is, “Are we working too much?” It is the intangible aspects hidden inside every work. And the answer to this question should be in the form of theoretical capacity. Theoretical manpower or capacity of the machine. How much do we need to produce this demand? What is the minimum amount of resources required to meet the demand? Understanding overproduction means understanding the theoretical capacity.

Of course, I do not intend to say we should cut out every excess capacity. As mentioned in my previous post, excess capacity is necessary for business sustainability. It is just that the “excess capacity” discussion often happens without understanding the “overproduction.” Typical operations will claim they don’t have “excess capacity” while conducting “overproduction.” It is better to stop and highlight the overproduction than keep running and pretending to be busy.

Another symbol for production is “創る,” which is more used “to create.” To read this symbol, “Tukuru” happened in 2010, after TPS was developed or Ohno’s era. So, I will keep it as another story.